Saturday, 10 Mar 2012
Reuters reported that prompt physical steam coal prices fell slightly by around 25 cents a tonne on Friday as buyers pulled back and in line with weaker oil values. Brent crude fell 57 cents to USD 124.77 a barrel on Friday after key US jobs data beat expectations, lifting the dollar broadly to multi month highs against other currencies.
TRADES
An April loading Newcastle cargo traded at USD 105.00 a tonne on globalCOAL.
PRICES
A May South African cargo was bid at USD 103.25, down 25 cents with no offer
An April DES ARA cargo was offered at USD 98.00, unchanged
A May DES cargo was bid at USD 96.50 and offered at USD 98.90, down 40 cents
An April FOB Newcastle trade at USD 105 a tonne on globalCOAL was seen as a sign of current weakness because the last trade three weeks ago was at USD 120.
Australian producers usually try to defend the visible Newcastle prices in the run up to annual term contract talks with Japanese utilities and these have only just started. Xstrata is seeking at least USD 120 and hoping for USD 125, a level which may be unattainable with spot prices considerably below that.
FOB Richards Bay prices have come under less pressure because supply remains tight and stockpiles low but South African prices have followed the general trend down since the start of the year.
Source - Reuters
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The use of sophisticated software systems for coal mining that is mostly burnt for power generation and steel production and adds to the greenhouse effect is valid for western countries who may allocate resources and funds to alternative and more greener sources of power. Some of the alternatives may be "safer" than the traditional mines. Unfortunately, coal market news show developing economies are more likely to increase their use of thermal coal & metallurgical coal in coming years because of its affordability and to meet increasing demands for electricity and steel. Whether they will embrace and utilise sophisticated software systems that no doubt add to the cost of production is yet to be seen. Cherry of www.coalportal.com
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